Tonight, after many hours of floor maneuvering, the House passed (by a vote of 123-24) a bill that would raise the minimum wage in Massachusetts to $10.50 by 2016. That’s the good news.
The bad news is that the House bill, as reported out of committee, would raise the minimum wage for tipped workers (which has been a paltry $2.63 an hour since 1999) to only $3.75 an hour. This is not nearly high enough. Massachusetts has the lowest tipped minimum wage of the six New England states. Tipped workers in America are twice as likely to live below the poverty line as the average worker. Experience in other states shows that, far from killing job growth as opponents have argued, a higher tipped minimum wage can lead to better employment numbers in tipped industries. Indeed, California and other western states do not allow for payment of a sub-minimum wage to tipped workers at all, but have thriving restaurant sectors nonetheless. And it makes sense, because restaurant workers with a little cash to spare like to go out to eat themselves, and let someone else do the serving. If they’re bringing home only $9 an hour, including tips, eating out is not going to be on the menu very often.
Rep. Farley-Bouvier sponsored an amendment (# 88) to increase the tipped minimum wage to $5.25 rather than $3.75. Last week, thanks to a strong campaign by the Raise Up MA coalition, the amendment received 40 additional co-sponsors. Yet today it was withdrawn due to inadequate support. Something is wrong when, in a body with a 129-28 Democratic advantage, such a modest amendment cannot pass. It means that there are at least 50 members of the House calling themselves Democrats who were unwilling to vote for it.
The House bill also failed to index the minimum wage to inflation going forward. Between legislative increases in the minimum wage, its purchasing power is virtually always eroded by inflation. Indeed, over the past 45 years, the increases that have passed have failed to recapture all of that erosion: the minimum wage today is, in real terms, almost a quarter less than it was in 1968 even though productivity has soared during that time. 70 percent of the American economy is consumer spending. The key economic problem of our time is inadequate consumer demand, precisely because so many workers are being paid substandard wages that leave them with virtually no disposable income.
Failure to index the minimum wage to inflation does not mean only that the value of low-income workers’ pay will continue to erode, robbing the economy of their consuming power, although that would be bad enough. It also means that the legislature will be forced to revisit this issue, and expend great time and energy on it, time and time again. A common complaint of business lobbies about this bill is that it is too much of a minimum wage increase all at once. Indexing the wage to inflation would eliminate this problem, providing the “certainty” business claim to want. Because it would not allow them to pay artificially lower wages for several years, however, most business groups oppose it. That leaves only the “raise-it-every-few-years approach” they claim to deplore. Heads they win, tails their workers lose.
Apparently a sizeable contingent of the House Democratic caucus finds that sort of calculus acceptable. As with the tipped minimum wage amendment, an amendment to include indexing to inflation in the final House bill, sponsored by Rep. Holmes (# 50), was withdrawn without a vote. Personally, I’m sorry. I would have liked to have seen a roll call on these two issues. Voters deserve to know where Representatives stand on them.
(UPDATE here — to reflect Hester Prynne’s point in the comments that things remain uncertain procedurally.)
Now – pending resolution of the procedural shenanigans you may recall from two weeks ago – the bill passed by the House ultimately may go to conference committee to resolve differences between it and the bill passed by the Senate all the way back in November (the other options apparently being that the House adopts the Senate bill, which I would love but don’t see happening, or that no bill will become law despite each house of the General Court having passed one, which would just be incredibly stupid). The Senate bill, worthy of our Commonwealth, increases the minimum wage to $11 rather than $10.50. And, unlike the House bill, it indexes the minimum wage to inflation and raises the tipped minimum to half of the regular minimum, meaning $5.50 to start and rising with inflation each year.
My thanks to all those members of the House who were prepared to support indexing the minimum wage to inflation and providing a higher tipped minimum wage than $3.75. But the job is only half done. I urge all readers to contact their Representatives while the bill is in conference committee, if the bill does in fact go to conference committee. Tell them to include these two important provisions in the final bill that is sent to the governor. Otherwise the people of Massachusetts will have do in November, at the ballot, what too many House Democrats failed to do today.